TMI Blog2017 (7) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of the assessee. merely because assessee has not shown agriculture income for himself may not be relevant for the purpose of levying the penalty against the assessee. Assessee offered explanation on the additions which were not found to be false. The explanation of the assessee is substantiated through evidence and material on record and assessee is able to prove that his explanation was bonafide and all the facts relating to the same and material to the computation of his total income had been disclosed to the Revenue authorities. Mere making of a claim which is not sustainable in law by itself will not amount to furnishing inaccurate particulars regarding income of the assessee. - Decided in favour of assessee. - ITA No. 638/CHD/2016 - - - Dated:- 9-2-2017 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER For The Appellant : Shri Sudhir Sehgal For The Respondent : Shri S.K.Mittal, DR ORDER This appeal by assessee has been directed against the order of ld. CIT(Appeals)-3 Ludhiana dated 04.03.2016 for assessment year 2007-08, challenging the levy of penalty under section 271(1)(c) of the Income Tax Act. 2. I have heard ld. Representatives of both the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, the entry shown in the bank account of Shri Jagdev Singh appears on 26.03.2007. As per the Sale Deed, seller has received the full amount of consideration before the date of transfer/date of registration. In this case, date of registration was 26.03.2007. As regards receipt of ₹ 4,77,000/-, it is noted that assessee failed to produce the said person. Entry of this amount was also not appearing on the balance sheet of M/s Royal Resort. The Assessing Officer, therefore, held that assessee failed to explain both these additions and accordingly concealed the income. 2(ii) It is also noted in the impugned order that assessee has not shown any agriculture income in his return of income. Despite of this, the assessee has a credit balance of ₹ 33,97,623/- of agriculture income of Shri Sharanjit Singh in the balance sheet of M/s Royal Resort as on 31.03.2007. The assessee was asked to explain why he has not shown his agriculture income in the return of income for the year under consideration. The assessee explained that Shri Jagdev Singh Grewal, HUF who is karta of the family sold agricultural produce to M/s Garg Seeds through assessee against bill No. 1 dated 26.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The onus upon assessee to explain above additions has not been discharged. It being a strict civil liability, therefore, penalty was imposed on the above additions. The ld. CIT(Appeals) also confirmed the levy of penalty and dismissed the appeal of the assessee. 4. The ld. counsel for the assessee reiterated submissions made before authorities below. He has submitted that detailed reply was filed before Assessing Officer to explain source of making investment in the purchase of agricultural land. Copy of the reply is filed at page 8 of the Paper Book in which it was explained that ₹ 10 lacs have been withdrawn by father of the assessee from the joint account on 26.03.2007, copy of the bank account is filed at page 11 of the Paper Book. He has submitted that authorities below have disbelieved the explanation of the assessee because the date of purchase deed registered on the same day on 26.03.2007. The ld. counsel for the assessee submitted that it is noted in the sale deed that seller has received amount on or before the date of registration which is same day on 26.03.2007 therefore, when amount of ₹ 10 lacs was withdrawn by father of the assessee from joint account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee submitted that assessee is member of HUF and is also entitled for agriculture income. He has also submitted that HUF has already declared agriculture income in their return of income, copy of which is already filed at pages 22 to 23 of Paper Book declaring agriculture income of ₹ 12 lacs in assessment year under appeal. He has, therefore, submitted that merely because assessee has not shown agriculture income in his hand, is not enough to levy the penalty against the assessee. He has further submitted that assessee in his balance sheet of M/s Royal Resort has shown the amount of ₹ 33,97,623/- payable to the HUF. The ld. counsel for the assessee has regards the addition of ₹ 8,98,528/- referred to the documentary evidences filed before the authorities below from page 30 to 65 which are confirmed ledger account of the creditors with certificate of Western Union for transfer of money with their confirmation to show that amounts have been received by assessee as loan. He has, therefore, submitted that even if the addition on merit have been confirmed, assessee explained all these issues and explanation of the assessee was not found to be false. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is able to explain that ₹ 10 lacs was available to the assessee for purchase of the property and explanation of the assessee is supported by copy of the joint bank account. As regards the amount of ₹ 04 lacs received from M/s Garg Seeds Corporation by father of the assessee against sale of agriculture produce, the assessee filed copy of account of his father in the books of M/s Garg Seeds Corporation which support explanation of the assessee. The assessee also filed copy of the acknowledgement of return of income of the HUF alongwith computation of income in which HUF has shown agriculture income of ₹ 12 lacs. Therefore, agriculture income is available to father of the assessee being karta therefore, father of the assessee could make available ₹ 77,000/- to the assessee for purchase of the property. 5(i) It may also be noted here that this matter was investigated by office of the Director of Income Tax (Investigation) Ludhiana and DDIT (Investigation) Ludhiana vide his report dated 27.08.2009 (PB-24) recommended for dropping of the proceedings because assessee was able to explain source of the money invested in purchase of the agricultural lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings have been given by the authorities below that explanation of the assessee was incorrect or erroneous or false. Therefore, there is no question of levy of penalty against the assessee in the facts and circumstances of the case. I rely upon decision of Hon'ble Supreme Court in the case of CIT Vs Reliance Petroproducts Pvt. Ltd. 322 ITR 158 in which it was held as under : A glance at the provisions of Section 271(1)(c) of the Income-tax Act,1961 suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word particulars used in Section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provisions, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no disp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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